Think You Hate Banks? You’ve Got Nothing on the French

WHY YOU SHOULD CARE

Because the next French Revolution could be financial.

June 7, 2017

Isabelle Dupuy can’t stand banks. “I truly hate those guys,” the 44-year-old French mother-of-two says with a look of disgust. “I know they are not thinking about me as a human being but as a way of making more money.” Madame Dupuy does not stand out among her fellow citizens. According to a new study published by YouGov.com:

Just 27 percent of the French public has a positive view of banks.

Compare that no-confidence vote to attitudes in the U.S. Despite the 2008 financial crisis, 75 percent of Americans still see banks as competent. The French, it seems, aren’t as quick to forgive. According to Jake Palenicek, YouGov’s U.K. head of custom research, it’s a trend that can be seen throughout Europe. “The financial crisis hit hardest in the United States and Europe,” he says. “However, while the U.S. returned to growth relatively quickly, Europe was more sluggish — particularly France and Italy, with both of these countries also experiencing much higher rates of unemployment than Britain and Germany.”

The fear of a repeat of the 2013 Cypriot bank crisis, in which the International Monetary Fund, the European Central Bank and others bailed out overleveraged lenders, also looms in the minds of most Europeans, and for good reason: Last October the European Banking Authority (EBA) found that 11 major EU banks failed simulated tests of resistance to economic-catastrophe scenarios. France’s four systemic banks (Crédit Agricole Groupe, BNP Paribas, BPCE-Natixis and Société Générale), though not among the 11 institutions that failed the EBA’s tests, are nonetheless 428 billion euros short of the prudent debt rules advocated by Alan Greenspan, former chairman of the Federal Reserve of the United States.

Adding to this climate of distrust and fear are scandals such as 2015’s Swiss Leaks, which implicated one of France’s largest banks, HSBC, in a multinational tax-evasion scheme. In France, Italy and Germany, major banks such as Société Générale, BNP Paribas, Monte dei Paschi di Siena and Deutsche Bank are facing ongoing allegations of mismanagement and lack of transparency, with concerns being raised about their potential stability in the event of another economic downturn. “Against this backdrop in Europe,” Palenicek says, “it is unsurprising that we see lower scores for trust and competence as well as cynicism about whether banks have their customers’ best interests at heart.”

But as with many aspects of French culture, the public’s relationship with banks is nuanced and complex. According to the Fédération Bancaire Française, 78 percent of French people have favorable opinions of their individual banks, meaning that while they don’t trust the system as a whole, they nevertheless have positive relationships with their personal branches. This apparent paradox can be explained by the fact that the French ascribe to a more personal approach to banking than countries like the U.S., where bank relations have become mostly digitized. French people maintain close ties with their bank advisers, building trusting relationships over long periods.

In the spirit of the revolution that took out France’s monarchy, it seems that the French continue to value the individual over powerful, far-reaching systems. Should that infamous French rebel spirit awaken today, banker, rather than royal, heads might roll.